State Bank of India (SBI) is looking for consultants for its risk management division to incorporate external inputs in its risk-modelling function in areas ranging from stress testing to climate change. The country’s largest lender floated a request for proposal (RFP) for empanelment of consultants in June for a five-year period.
The plan to engage external consultants is understood to have been in the works for a few months now. “The thinking within the bank has been that when certain new and unprecedented developments happen, you need inputs from external experts. For example, the Covid outbreak may render the bank’s entire database ineffective and an entire remodelling has to be done. That’s when external inputs become important,” said a person close to the development.
SBI expects that consultants will be able to offer advice on how to deal with such situations as also insights into the strategies adopted by other companies in similar situations.
The empanelled consultancy firms will be engaged on a time & material (T&M) basis for deployment at bank departments. The firms will have to deploy personnel in a diverse set of areas in risk management, ranging from enterprise risk and credit risk to stress testing, pandemic risk and climate change.
Risk management has become a crucial area of focus for banks in India as a string of events has hit the way business is done, with the Covid pandemic being the latest among them. The Reserve Bank of India (RBI), too, has sought to bring greater professionalism to functions like finance and risk management at banks. It has mandated that the office of the chief risk officer (CRO) operate from the credit sanctioning process. The CRO shall have direct reporting lines to the MD & CEO as also to the risk management committee (RMC) of the bank’s board. In case the CRO reports to the MD & CEO, the RMC shall meet the CRO on one-to-one basis, without the presence of the MD & CEO, at least on a quarterly basis, the central bank had stipulated in 2017.